One aspect of the legal fight over Shoreline Amphitheatre’s books could prove to be a double-edged sword for the city.
Mountain View officials have repeatedly threatened to evict Bill Graham Presents from its lease at Shoreline, accusing it of breaching several conditions of the agreement and hiding more than $80 million in revenue.
So far, those threats have been necessarily on the back burner while the two parties prepare to hash things out in court. But if the city prevails in its civil case against BGP’s parent company — a Clear Channel spin-off called LiveNation — it could have a new problem on its hands: finding someone to run the 23,000-seat venue.
LiveNation is the biggest concert promoter in the world and, as the new parent company of Bill Graham Presents, is uniquely suited to promote shows at the amphitheater built by the legendary promoter. Win or lose, some city council members fear they may find themselves in the awkward position of having to renegotiate a lease with the company after the trial ends.
“It’s not like there’s a lot of people waiting in line that we can go pick out,” said council member Tom Means. “We may have to sit down at the table with these people, work things out and write a better contract.”
Other council members have said their concern over having to re-up with LiveNation is outweighed by their desire to hold the company accountable to taxpayers. Council member Matt Pear even suggested that the city could take over operation of the venue. The city made a similar arrangement at the adjacent golf course after uncovering corruption in a contractor’s operation there.
Other companies could step forward, though none as big as LiveNation. House of Blues promotes shows at dozens of venues around the country. The couple that once ran BGP, before it was swallowed up by a series of corporate parents, has found success in a new venture, San Francisco-based Another Planet Presents.
“There’s any number of companies that could potentially operate it,” said Gary Bongiovanni, editor of concert industry trade publication PollStar magazine. “But you’re generally in a stronger situation when the dominant promoter is trying to feed as many shows in there as possible.”
The lease agreement, signed after the city provided 65 acres and an $8 million loan for construction of the amphitheater, includes a number of provisions that are not necessarily common in the industry. For instance, the promoter is obligated to pay the city 6.75 percent of “gross receipts,” a chunk of proceeds from the sale of the venue, and a similar percentage of revenue from shows promoted at other large venues with a 35-mile radius.
It is this last provision, originally included to prevent Graham from steering shows away from the venue if he got a better deal somewhere else, that comprises the bulk of the city’s claimed damages. Between 1999 and 2004, a recently released city audit says, the company failed to report $57 million in revenue from shows at HP Pavilion in San Jose and AT&T Park in San Francisco. Both venues were built after Shoreline.
“I’m actually surprised that the city of Mountain View was even hip enough to include the clause,” said Bongiovanni. “That is relatively unusual.”
Means said the contract seemed like a good deal for the city on the surface, but it did not have enough incentives to keep the promoter in line.
“Sometimes, people are only as good as the contract they serve under,” said Means.
E-mail Jon Wiener at jwiener@mv-voice.com
